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Electric cars

Alibaba-backed China car start-up to raise US$2.7 billion this year

PUBLISHED : Tuesday, 10 April, 2018, 10:38am
UPDATED : Tuesday, 10 April, 2018, 10:38am

Xiaopeng Motors, which counts Alibaba Group Holding and Foxconn Technology Group among its investors, plans to raise 17 billion yuan (US$2.7 billion) in funds this year as the Chinese car start-up seeks to take on rivals in the world’s biggest market for electric vehicles.

The company plans to start pre-sales of its first model, the G3 crossover, by the end of this month, founder He Xiaopeng said in an interview at the Boao Forum in China. He didn’t elaborate on the fundraising plans.

Xiaopeng is among start-ups striving to become China’s Tesla and reshape the auto industry as the country promotes new-energy vehicles in an effort to clean up the environment and cut its reliance on oil imports. Already the biggest EV market, China accounted for more than half of worldwide sales last year. Sales of all vehicles grew at a monthly clip of more than 20 per cent in 2016 and 2017, according to data from the China Passenger Car Association.

Alibaba and Foxconn led a round of fundraising by Xiaopeng, investing 2.2 billion yuan, the carmaker said in January. That put the total investment as of end-January at 5 billion yuan, according to the company.

The investment marked Alibaba’s latest move in the car industry, as the internet giant bets connected cars will generate new revenue. The Hangzhou-based group has developed its own car operating system.

Xiaopeng’s He said the company will collaborate with Alibaba in maps and cloud products in a non-exclusive alliance, adding the company’s focus is on ensuring quality of production ramp-up.

Xiaopeng supports China’s plan to allow foreign carmakers greater ownership in joint ventures as this will spur real competition and ensure the quality of cars made in China, He said.

Alibaba owns the South China Morning Post.